BIO Commends SEC Efforts to Combat Illegal “Naked” Short Selling
WASHINGTON, D.C. (Tuesday, September 30, 2008) - The Biotechnology Industry Organization (BIO) today released its letter to SEC Chairman Christopher Cox and SEC Director Linda Thomsen commending the agency for its efforts to investigate fraud and crack down on activities such as rumor mongering and abusive naked short selling in capital markets.
“This type of illegal behavior is especially detrimental to emerging biotechnology companies whose value is so dependent on the results of their research and development efforts,” said Alan Eisenberg, Executive Vice President for Emerging Companies and Business Development at BIO. “The peddling of false rumors regarding the results of clinical trials could substantially drive down a biotechnology company’s stock price. Given the resource intensive nature of our industry and its dependency on capital markets, these illegal activities can be particularly damaging to our companies’ efforts to gather investment.”
Eisenberg also said that BIO “looks forward to working with the agency during the regulatory rulemaking process to ensure that securities of all public companies, including the biotechnology industry, are protected.”
The vast majority of biotech companies are in the research and development phase of bringing medical therapies through clinical trials so that they can become available to patients. Because biotech innovations have an especially long and expensive road from the lab to the patient – up to $1 billion over 10 years -- the current turmoil in global financial markets has rendered them especially vulnerable to failure.
See the full text of the letter here: http://bio.org/letters/SECsupportletter92208.pdf